New Statesman on Ireland

An ‘interesting’ take on the Irish economy by the New Statesman is at

64 replies on “New Statesman on Ireland”

“the UK’s nearest neighbour is now enforcing the most savage cuts in public-sector pay, child benefits and social welfare payments of any EU government. ”

I thought that the Baltics had already had a 20% PS wage cut?

“Such is the level of misery being endured by the increasingly bewildered citizens of this little republic that even Brian Lenihan, the man principally responsible for inflicting it, has publicly acknowledged that fellow Europeans are “amazed at our capacity to take pain”.”

Is it time to pass on the gimp mask?

Didnt think that is was ‘that’ interesting!

The article seems more like a thinly-veiled attack on the Tories than anything else. There is little in the way of analysis of the Irish economy, except to show the awful things that happen when you don’t borrow on a massive scale to fund current account expenditure and chase something called “stimulus.” There’s no real context for it, and some of the remarks are bizarre.

For instance: “Dublin has delivered three slash-and-burn budgets estimated to have sucked about 5 per cent out of the nation’s GDP.” – estimated by who? Unlike Britain, apparently, we do have to pay back our debts with interest. It’s not just free money.

He has got the Ahern era just about sussed, but everybody’s managed to peek beyond those smoke and mirrors now.

I think these types of article fail to realise the predicament that Ireland was in prior to the bust (if that is what you would like to call it)

Accepting a long term equilibrium exists for GDP/GNP, taxation and expenditure etc, we were way ahead of the curve on it.
We did all our spending during the boom rather than after it.

Now oweing, or is it owning debt and few national resources, the potential for spending increases isnt there after we blew our load during the boom.

Articles inches are spent presenting simplifications of our circumstance, like a sick person needing more nutrition to get well.
When the better analogy is something like alcoholism. We have woken up, on a beach after the galway races, in some elses clothes, that we have to give back and pay rent on them, while managing a national hangover.

It is time to admit that we have a problem!!!!

1. We admitted we were powerless over alcohol – that our lives had become unmanageable. SEPT 08??

2. Came to believe that a Power greater than ourselves could restore us to sanity. WAS THAT THE EU?

3. Made a decision to turn our will and our lives over to the care of God as we understood Him. THE ECB?

4. Made a searching and fearless moral inventory of ourselves.

5. Admitted to God, to ourselves and to another human being the exact nature of our wrongs. READ ABOVE

6. Were entirely ready to have God remove all these defects of character. READ ABOVE

7. Humbly asked Him to remove our shortcomings. WORK IN PROGRESS

8. Made a list of all persons we had harmed, and became willing to make amends to them all. NO, AT PRESENT JUST BANKERS AND LARGE DEVELOPERS

9. Made direct amends to such people wherever possible, except when to do so would injure them or others. NAMA, BUT ITS COMPLICATED

10. Continued to take personal inventory and when we were wrong promptly admitted it. NOT QUITE A WORK IN PROGRESS, CERTAIN PEOPLE STILL IN DENIAL

11. Sought through prayer and meditation to improve our conscious contact with God as we understood Him, praying only for knowledge of His will for us and the power to carry that out. OBVIOUSLY, GOING FORWARD… WE WILL BE AN INNOVATION ECONOMY

12. Having had a spiritual awakening as the result of these steps, we tried to carry this message to alcoholics and practice these principles in all our affairs. WE MAY NOT BE ABLE TO FLOG THE PEACE PROCESS FOR MUCH LONGER, SO….

Now, I am not an econometrician by any standard, but I calculate that we are at Stage 3 of our recovery…

Back to work

It wasn’t a great article. Plug in a couple of exaggerations here, an inaccuracy or two there and hey presto! Here’s my 2,000 words Ed, I’m of to the pub!

“As total expenditure by the Dublin exchequer was just under €60bn last year, this means that the Irish state is set to shrink by a full quarter in less than half a decade”

Bad news for coastal dwellers.

This is nothing but a combination of Paddy-whackery and a hit on the Tories pledge to cut public spending. It doesn’t even try to form a balanced argument.

@ Eoin. Stop the press: New Statesmen produces left-wing ‘analysis’ of Irish economy! Looking forward to Das Kapital being the subject of next week’s post.

@ Paddy

bizarre as it sounds, if you take a look at the New Statesman’s current issue (via the link above) they seem to be backing Labour far more than the Conservatives right now. Dont ask me why though.


Unlike the balanced arguments we get on here of the “I say public spending should be cut in half!” “No! I say it should be cut by two thirds!” sort.

Philip Lane previously gave us to a point-by-point examination of why standard Keynsian prescriptions have far less force when applied to Ireland, as opposed to countries like the UK.

That piece came in light of just such suggestions by David Blanchflower (the economist, not the footballer) at the Dublin Economic Workshop.

And Lane’s points apply with equal force to this piece in the New Statesman, as they do to much of the proscriptions from the New Statesman’s intellectual stablemates in the Irish trade union movement.

That said, there is a vitally important need to recognise the inherent deflationary impact of nearly all cuts in state expenditure. And to ensure so far as possible that the cuts chosen have a relatively modest impact in reducing aggregate demand and potential output in the economy.

Or in language the New Statesman can understand: let’s not turn the whole country into a greener though equally depressed version of post-industrial northern England, in the name of balancing the books and somehow fostering recovery. Though cuts are needed, and Keynsian prescriptions are largely unattractive or unavailable, there’s far too much thinking and rhetoric about that’s long on accountancy and short on economics.

@ Paddy

apologies, for whatever reason i had it in my mind that the New Statesman was right wing! D’oh. Probably something to do with that 90’s tv show with Rik Mayal!! Either way though, their Paddy-whackery is somewhat uncalled for.

@ Ernie

you post the counter-argument to the “spending cuts” argument, so doesnt that qualify as a balanced argument? Not entirely sure what exactly you want, its an open forum…(as opposed to a New Statesman article)

“Not entirely sure what exactly you want”
On expectations….
No Mr. Bond, I expect you to die…

Always wanted to say that 😀

Laughable article. Reads like a series of tweets by a twelve year old on a ‘put yourself in their shoes’ competition.

“From poster child of free-market globalisation everywhere from Hungary to Honduras, the UK’s nearest neighbour is now enforcing the most savage cuts in public-sector pay, child benefits and social welfare payments of any EU government. Such is the level of misery being endured by the increasingly bewildered citizens of this little republic”
Eh, from free-market to, eh, reduce the state, or, as it is also known, free-market…
The only EU government that has yet had to cut, so not hard to be “the most savage”…
The rest is patronising clap-trap. Paddy-whackery as has already been said.

And that’s just one and a half sentences of the article…

If Britain (and that is the issue in this article, not Ireland) adopts the Tory slash and burn policies we here will NOT benefit from it. The reduction in demand from our biggest trading partner will wipe out the (illusory) recovery in this country.

Eh, from free-market to, eh, reduce the state, or, as it is also known, free-market…

Uh, no. You seem to be missing the point of that sentence which is this: from poster child of free market globalisation to (implicitly) basket case of free-market globalisation. From example to be emulated to example to be avoided at all costs. Of course the die-hard ideologues on this site can’t even see the point. They’re all doubling down. It can’t be that faith in the ability of markets to self-regulate has been decisively refuted by recent events. Oh, no no no. That could never happen because that bit of dogma is impervious to evidence. But I must laugh (through my tears) when I hear some laissez-faire economist or another lament the fact that the regulator “didn’t do his job” when, of course, some of these very same economists have long argued that such regulation is little more than a drag on the dynamic and self-regulating capitalist system. You’d think they’d be ashamed, but that emotion is unknown in the corridors of power in this country.

It follows, of course, that since markets are never wrong (including the bond market), the culprits to be punished are obviously those parasites in the public sector who are holding back the capitalist dynamo.

The New Statesman is a thoughtful left wing magazine that has been in circulation since 1913. They were consistently sympathetic to the Irish in the days when we needed sympathy. The exact opposite of the sniping Economist. For this reason I would not dismiss what they write even though I would like to. We should take this for what it is and that is an honest, thoughful left wing take on our present predicament.

We should take this for what it is and that is an honest, thoughful left wing take on our present predicament.

100% disagree. It reads like a party political broadcast with Ireland the convenient scapegoat for the “wrong approach.”

I agree with MickeyHickey that the New Statesman has a distinguished pedigree, but Dave is correct; this piece is just a salvo in Britain’s general election campaign. And, Ernie Ball, I know you’re angry, but this is an open blog and a diversity of views (often more scattered and dotty than, I suspect, the owners and contributors feel comfortable with) is expressed. I don’t detect a “party-line”; the focus is on economic evidence and analysis.

And with respect to the Irish economy (and economies generally) one key thing that economic evidence and analysis demonstrates is that genuinely competitive markets, subject to effective policy direction and regulatory control, will generate economically efficient and socially desirable outcomes.

Absent this policy direction and regulatory control markets will generate catastrophic outcomes. With the dismantling of regulation of the international financial sector over the last 20 years – and the capture of policy-making by those seeking the removal of effective regulation – the current financial and economic crisis was entirely predictable. (Irish policy-makers couldn’t help themselves applying their own twist to worsen the outcome by creating a totally ineffective regulatory “facade”, leaning with, rather than against, the economic cycle and fuelling the false boom.)

You might wish to throw out the baby of markets with the bathwater of failed policy and regulation, but I don’t think you’ll find many takers here. If that makes us ideologues in your eyes, so be it.

The challenge now is to rebuild the architecture of effective economic policy and regulation – both nationally and internationally. The British government is beginning to take steps to bring the Masters of the Universe to heel. It is now being followed by stronger steps by the Obama administration. This will be a long haul and the forces that subverted markets in their own interests remain powerful, but it the only course to follow.

Ireland has barely begun – and a banking inquiry whose remit will be determined by those who were ultimately responsible for the current debacle is unlikely to lead to the fundamental refroms required. Only a removal of the current Government will provide any hope of initiating the process required.

@ Paul Hunt

“The challenge now is to rebuild the architecture of effective economic policy and regulation”

I would disagree with this, and posit that the failure was more to do with the wrong person in the job, or the wrong appointment methodology, etc

See Sam Smyth, today?:

As long as the political class maintains this, the problem will continue and no political party has clean hands here. It also creates a culture of ‘yes minister’ and yes men.
You could argue that because the political class is non meritocratic, then why raise the standards above that.
This is a political problem with economic consequences as opposed to a economic problem with political consequences- ie change of government



Indeed. You make valid points, but all power and authority ultimately flows from the people. They should be given their opportinity to pass judgement. The current government is pursuing and compelling the enactment of policies for which it has not received a popular democratic mandate. The obligation would then be on a prospective alternative government to present its case to the people. This is the nature of representative democracy – and we, pace Churchill, have not found a better way. And, echoing Cato the Elder’s “Carthago delenda est”, this Government must go.

The New Statesman and Johann Hari comments on social welfare in Ireland and the UK are nonsense. They are simply designed to portray the UK Labour Government in a good light in relation to improving the lot of the most disadvantaged and reducing poverty levels. We need to understand where they are coming from. The UK Labour establishment (both political and media) is fighting a tooth-and-nail battle to hang on to Scotland. I don’t just mean in relation to the Labour party hanging on to votes in Scotland, but to the UK itself hanging on to Scotland as a colony. An essential requirement in this effort is lots of Paddy-bashing, not in the old-fashioned racist sense that the Tories might once have engaged in (a lot of the UK Labour establishment are actually of Irish descent), but in the sense of portraying Ireland as a Thatcherite economic wasteland.

Whatever The New Statesman and Johann Hari say, the actual reality is that, in relation to improving the lot of the most disadvantaged and reducing poverty levels, the UK Labour Government’s record is abysmal. The disadvantaged in Ireland have fared far better in Ireland in the past decade than in the UK. Of course, I realise that some economists think that social welfare payments in Ireland are now too generous, That’s a separate argument that I’m not commenting on. I’m simply commenting on what has actually happened.

Back in the late 90s, the poverty rates in Ireland and the UK (based on 60% median income) were both over 20%. Since then, the rate in Ireland has fallen to 14.4% (most recent SILC report for 2008), while that in the UK has stayed stuck at over 20%. By the way, and as a slight digression, the last time I gave a figure from the SILC report for the poverty rate in Ireland on this site (about six months ago), a spokesman for CORI immediately posted back and said that the figure I gave was too high because I wasn’t taking account of SSIAs. I didn’t fully understand his argument, but I have the distinction of being the only person ever accused by CORI of exaggerating the level of poverty in Ireland. The reason for Ireland reducing its poverty rate, while the UK hasn’t, is that over the past decade social welfare benefits have been increased by far more in Ireland than in the UK. As I said above, some economists think that this has gone too far in Ireland, but I’m simply commenting on what has happened, not on the argument as to whether or not it should have happened.

Let’s now look at the ‘savage welfare cuts’ in Ireland in 2010.

The reality is that social welfare benefits are also being CUT in real terms in the UK in 2010 – in the case of pensions, by more than in Ireland. Many of my friends north of the border are allready experiencing this. The UK cuts in social welfare benefits are simply disguised by UK inflation. This is now predicted by most economists to rise above 4% in 2010. I myself am predicting that it will go well above this figure (thanks to the Brown/Darling policy of printing money like it was Monopoly money and devaluing the Pound sterling by a record amount). But let’s ignore my prediction and stick to the consensus forecast of around 4% UK annual inflation in 2010. The increases in social welfare benefits announced for the UK this year are all well below this, so they are effectively being CUT in real terms.

In his December budget statement, Alistair Darling announced that the state old-age pension in the UK would be increased by 2.5% in 2010, and child benefit by 1.5%.

The most recent figure for annual inflation (HICP) in the UK is 1.9% for November 2009. However, all economists agree that this is now about to surge for two reasons: (a) the temporary 2.5% cut in VAT, implemented on 1 December 2008, will drop out of the annual inflation figure in December 2009 and (b) the 2.5% increase in VAT (i.e. the removal of the previous temporary cut), implemented on 1 January 2010, will be included in the annual inflation figure in January 2010. Most economists predict that UK annual inflation (HICP) will rise to about 4% in January 2010, and then increase gradually for most of 2010.

Any comparison of changes in social welfare benefits in Ireland and the UK in 2010 needs to take into account the fact that average annual inflation (HICP) is likely to be around 6% lower in Ireland in 2010 than in the UK.

Looking at the individual social welfare items in Ireland and the UK:

the state pension in Ireland is being frozen in 2010, which effectively means a small rise in real terms – in the UK, as I said above, it is being increased by 2.5%, which effectively means a small cut in real terms

child benefit is being cut by about 9% in ireland, which means a real cut of about 7% after negative inflation is taken into account – in the UK, as I said above, it is being increased by 1.5%, which effectively means a real cut of about 2.5% after 4% inflation is taken into account

So, averaging these out, there is not much difference.

State pensions will increase in real terms in Ireland by a few per cent more than in the UK, but child benefit in Ireland will be cut by a few per cent more in real terms than in the UK. We need to remember, however, that, even after these changes, child benefit is far higher in Ireland. The benefit for each child in 2010 is roughly as follows (assume 1 Euro = 90p excange rate):

1st child: Ireland: 150 euros a month – UK: 99 euros a month
2nd child: Ireland: 150 euros a month – UK: 64 euros a month
3rd child: Ireland: 187 euros a month – UK: 64 euros a month

for all subsequent children the payments are as for the 3rd child

So, I think all this puts the The New Statesman’s and Johann Hari’s claims into some sort of perspective.


“JTO, do you work for the government/their PR agent or something similar?

NO! But, I wish I did, then I’d earn a lot more than I currently do.

I consider tha article to be very accurate, as an assessment of our current circumstances. He did neglect to mention the dreadful waste of good capital involved in NAMA.

It is intended for UK readership of the intellectual kind. It is not going to do much among that readership, except to point out what may be necessary no matter whom is elected. It is not meant to change voting intentions. Iy is a background piece on a near neighbour and their courage in grasping a nettle and why it happened. There is believe me, admiration in that article for what has been done.

If the commentators on this, who think it was penned to scare voters into not voting Tory, (never knew that derivation and have wondered for years about it!) think a little it is they who are scared and they resort to the usual bravado about the British. There is no need to fear the future. It is coming and it will be very bad, but the article itself is very well researched and written.

Perhaps the raised emotions are out of fear for the coming economic rookery, in the late hours of the day when the raucous cries block out all rational thought?

We got there by trusting banks, banking and bankers!
the coming international spills in the next few months will alert us to an opportunity not to proceed with social welfare for the developers.

I have just read the J Hari article. Now that was barracking!
Trouble is, he is economically ignorant and does not know history either.

“What has been done was done for the good of the state.” This was the warrant signed by Richlieu of the red cap, in settling old scores in France, under seige by British spies with British Gold.

The results of the Irish actions will be very strong and helpful, if we abandon Nama. But blowing another bubble in soverereign debt will only defer what is iinevitable as von Mises and others have said. Eventually the demand for credit collapses and with it the entire financial system. Aside from the pointless and wasteful welfare for land and banking, the correct solution has been followed only by Ireland, with half marks to Australia for hand outs directly to voters who were not also wealthy. They spent it, or paid down debt. It did enter the economy, not the false one, the real one. There will still be a terrible reckoning in Australia, but the Irish and soon, Icelandic example will be very helpful to us.

All the other countries are paying off their crony partners with targetted spending. But they neglect the consumer, who was the fatted and sacrificed calf, in favour of the special interests in need for hopes of re-election. Only Ireland has voluntarily put on the fiscal rectitude, a few years too late but ahead of the rest of the pack.

There is a very strong chance that the bondholders, whoever the majority of them maybe, will be wiped out soon. Paying them back is like a newspaper paying the dead plaintiff for damage done by a libel. The law alows a complete exoneration to the defendant if the plaintiff has died!

@Pat Donnelly – “The law alows a complete exoneration to the defendant if the plaintiff has died!”.

Not 100% sure, but fairly sure, that has now changed with the introduction of the Defamation Act 2009 in Ireland?

The New Statesman are probably correct that the hard right in Britain would like to do a Lenihan. The shocking thing in Ireland is how many of the left, the centre and the moderate right have acquiesced in NAMA, the banking concealment and the cuts in welfare and low pay.

I am also struck by the number of economic and political commentators who alternate between threatening us with disaster and telling us the recovery has started. The most dishonest threat has been that the IMF could take over the country in the morning if NAMA isn’t passed:

The establishment (FF/PD/Ind/GP/FG/Lab/SF) got NAMA passed through a campaign of scaremongering by proponents and half-hearted objections by the “opposition”. Garret Fitzgerald was a key figure in baselessly threatening the country with the IMF:

Maurice O’Leary nailed him in August 2009:
“In Dr. Fitzgerald’s article, the core of his argument is:

“I am concerned – whether because of loss of nerve or because of failing to secure Dáil support for these two key elements of its programme – that the Government may fail to get through the Dáil by early December either or both its budgetary proposals and its measures to deal with our banking crisis. This could undermine our capacity to borrow the huge sums we need to keep going. After these two measures have been successfully implemented, if the Dáil or the electorate so decided, there could then safely be a change of government. But in my view it would not be helpful for that to happen within the crucial three months ahead.”

On the 30 June the NTMA held balances of €28.9 billion.
Some of it may be needed to cover debt that is maturing shortly.
But to suggest that even if the capital markets were spooked by a general election before NAMA and the budget are passed, that we would run out of cash before a new government were in power and had a new strategy based on an electoral mandate is irresponsible.”

With currently €5Bn in cash and I believe €12 Bn in shares through our national pension fund (excluding those in AIB and BOI) we have not been in any danger of the IMF at any stage in this crisis, provided the corective measures that ALL main parties agreed were necessary were taken.

In other words, the IMF was simply a means to scare us into accepting NAMA. This is shocking behaviour by the entire opposition. We now need to halt NAMA and launch an inquiry into it – especially into the role of those who purported to object to it.

There is a page on facebook called ‘replace the current Irish government with a badger named Stephen’. It has 7,481 members.

What is the value of the €7,000,000,000 given by Fianna Fail and the Green Party to AIB and BOI right now.

Answers on a postcard.

I’m thinking that’s €7,000,000,000 right down the toilet.

And yes that’s where the Bondholders live.

You can take it that the €4,000,000,000 given by Fianna Fail and the Green Party to Anglo Irish Bank is now and (they knew it when they gave it) was to feed the people who live in the toilet.

Now, global macroeconomic deceit aside, can anybody and I mean ANYBODY tell me why Irish Citizens should (having already given €11,000,000,000 to these bottom dwellers) give one cent more.

Another €6,000,000,000 to the bondholders of Anglo Irish Bank?

There’s something really sick about this.

And I’m calling it TREASON.

Who disagrees that this is TREASON?

“Article 39

Treason shall consist only in levying war against the State, or assisting any State or person or inciting or conspiring with any person to levy war against the State, or attempting by force of arms or other violent means to overthrow the organs of government established by this Constitution, or taking part or being concerned in or inciting or conspiring with any person to make or to take part or be concerned in any such attempt.”

Has not War been levied against this State?

Though that the War was silent is not the treasury of this State lost?

Does Article 39 exclude Financial Warfare?

Is Financial Warfare not the exact thing that the Bondholders do?

Would Bondholders not destroy a State?

Who are the Bondholders?

Not China. Not India.

Who are the Bondholders?


I have no idea, it wasn’t published in Brisbane!

Thanks for letting defendants know that they may still be on the hook! For the sake of accuracy therefore, please do not rely on Pat Donnelly and his ramblings on libel, if you intend to defeat an action by bopping off the plaintiff. His law degree is over 30 years old and he is going senile!

“None dare call it treason, for if it doth prosper, it is not treason”. Be careful whom you take on?

The ex-Australian minister for Foreign Affairs a shocking tory called Alexander Downer, once denied, straight off the bat as they say here, that Indonesian security forces could have been involved in the Bali bombing, the first one. Trouble is, he said it too fast and the source was the ex-president of Indonesia, one of the less corrupt ones.

Treason like this goes on all around the world and it is called banking. Read what the IMF got up to engineering loans to third world countries! If the current leader did not take his cut, compromising himself, then he might have an accident and the new leader would get an offer he could not refuse!

Foillow the money. It often goes through the thoroughly impeccable banking system! Unless it is a wad of cash thrown onto a golf tee.

@ Paul Hunt

“all power and authority ultimately flows from the people. They should be given their opportunity to pass judgement. … This is the nature of representative democracy – and we, pace Churchill, have not found a better way”

Taking that the current lot were voted in, and consequently reflect the will of the people, one could argue that they are a reflection of the people.
You have a high opinion of the people!!!


The New Statesman author seems to be able to hold two contradictory ideas in his head at once. The public sector was both savagely cut while at the same time being bloated.

First the good inner cop:

the most savage cuts in public-sector pay, child benefits and social welfare payments of any EU government.

then the bad:

During this period, popularity – and peace with the unions – was bought by slashing income tax and shovelling much of the proceeds of the nation’s property boom into a bloated public sector as well as vastly increased social-welfare benefits.

“Interesting” is probably the best word one can use alright. It was an eye-opener in economic illiteracy and a stunning example of both poor research (some of its assertions have been debunked above, with seemingly little more than a Google search) and dodgy logic/notion of time, with Budget cuts for 2010 bringing about a drastic reduction in GDP in 2008/2009!

@ E65bn (i dont see the point in calling you bu your new new name…)

“the hard right in Britain would like to do a Lenihan.”

Does Alistair Darling count as the “hard right” now? Cos even he has accepted that there is going to have to be, in his own words, “the toughtest spending cuts in 20 years”…

Correction: Re. Questioning of Politicians:
“and ask them about their roles in the bank inquiry”
should have read:
“and ask them about their roles in our Economic and Banking Chernobyl”.

Remember Colm McCarthy said we needed an explanation for our banks collapse on 26th July 2009. The government and opposition have already stalled for almost 6 months. They can easily stall for 6 weeks until NAMA has transferred its first batch of loans.

Enda Kenny condemned the government’s welfare cuts and cuts for low paid public sector workers. I would describe Enda Kenny as being centre right. Therefore the government in general is hard right.

@ e65bn

i ask a question about Alistair Darling, and you answer it with a reference to Enda Kenny. Probably makes sense in your head, but only there. For clarity, Alistair Darling was a hardcore marxist back in college, so this would be quite a journey for him if he now occupies the “hard right”.

The really astounding thing in Ireland is that we have had since the local elections, if not since the bank guarantee in Sept 2008, a de facto national government. But it’s a uniquely Irish national government – the opposition have remained outside and claim to be completely opposed. The opposition oppose loudly but ineffectively, allowing the government to do what they are all agreed on (presumably excluding cuts to the blind, the widowed and the disabled?). See Eamon Gilmore agreeing that the deficit had to come down by €4Bn in the last budget.

Since the June elections, as far as I can remember, the opposition have been doing their best not to actively oppose at all:

No cancellation of pairing arrangements.

One motion of no confidence in the government – tabled directly after the local elections, without any build up, so that the government could get it out of the way as as soon as possible.

No motions of no confidence in ministers – not even one in Noel Dempsey, the Maltese Phoneman, or in Mary Coughlan over Fas, or Brian Cowen over everything, or Brian Lenihan over the bank guarantee, NAMA etc etc.
Certainly none with any great media build up.

Not even many (any?) strident DEMANDS for ministerial resignations.

No sustained campaign of parliamentary disruption, as the British Conservatives did against a tottering Labour government in the late seventies.

Stephen Collins explains the opposition’s thinking here:
“The best-case scenario for the Opposition is that Fianna Fáil and the Greens do all the dirty work over the next year or two and then hand over a recovering economy to a Fine Gael-Labour coalition, but things might not pan out that easily for them.”

Why are the opposition doing this? Probably because we are in, not for the IMF, but for years of pain. This isn’t 1987 – although it was 8 or so years after that before the Celtic Tiger appeared. This is 1983 but with a government that is, I presume, (I don’t know if anyone has actually verified this) bringing the official deficit down slightly more quickly. Unfortunately through NAMA the de facto national debt is about to go through the roof.

The opposition had a chance to be the Irish FDRs, who took office in 1932 when things were at their worst. Instead they decided to be the Irish Tony Blairs, who took office after the British conservatives had done the dirty work in repairing the effects of their burst bubble (with a huge devaluation). Unfortunately we can’t devalue and we had a gigantically larger property bubble than Britain. It will be several years after 2012 before the new government starts talking about “Cool Hibernia”.

The only way the opposition can get out of this is to come clean about what they have been up to.

Stephen Collins explains the opposition’s thinking here:
“The best-case scenario for the Opposition is that Fianna Fáil and the Greens do all the dirty work over the next year or two and then hand over a recovering economy to a Fine Gael-Labour coalition, but things might not pan out that easily for them.”

Why are the opposition doing this? Probably because we are in, not for the IMF, but for years of pain. This isn’t 1987 – although it was 8 or so years after that before the Celtic Tiger appeared. This is 1983 but with a government that is, I presume, (I don’t know if anyone has actually verified this) bringing the official deficit down slightly more quickly. Unfortunately through NAMA the de facto national debt is about to go through the roof.

The opposition had a chance to be the Irish FDRs, who took office in 1932 when things were at their worst. Instead they decided to be the Irish Tony Blairs, who took office after the British conservatives had done the dirty work in repairing the effects of their burst bubble (with a huge devaluation). Unfortunately we can’t devalue and we had a gigantically larger property bubble than Britain. It will be several years after 2012 before the new government starts talking about “Cool Hibernia”.

The only way the opposition can get out of this is to admit everything.

In “The Week in Politics Show” this evening it was stated by FF North Dublin TD Daragh O’Brien (Vice Chairman of the Dáil Committee of Public Accounts)
that all parties had agreed that the issue of the banks would be dropped until after a CAG report due to appear in March this year. I have not heard a lot about this report and it will not deal with political responsibility:

This is further evidence of an agreement between the parties to keep discussion of our banks off the public agenda until after NAMA at the earliest.


“You have a high opinion of the people!”

For me, it is a fundamental feature of democracy that the people have an inalienable and absolute right to be wrong; but they have an equally inalienable and absolute right to change their minds and to express this. Currently they are being prevented from doing this. There is a naked political calculation in everything this Government does; and that is to ensure political survival for as long as possible and to evade any concession of culpability for the current mess.

Therefore, this Government must be removed. And if it requires a mass petition, so be it.

@ E65bn

does repeatedly re-posting the same comments, most of which are entirely devoid of any coherence or relevance to the thread, actually serve any purpose other than to be an irritance to everyone else on here? I ask this with complete sincerity.

A few points:

1. Shhhh.

2. The reposting of the comment at 9.31 was accidental.

3. Only one of the last 29 blogs was about banking inquiries, on Jan 10th. It wasn’t about the nature of the one that should take place in Ireland but about the one currently taking place in the US. In the absence of specific blogs I have had to resort to hijacking. You will I am sure concede that the issue of a bank inquiry is now being discussed throughout our society.

4. If you find my comments intolerable I will forgive you for skipping them.

I have just heard Noel Whelan – whom I have seen described in the media as a close advisor to Brian Lenihan – advocate a process for the bank inquiry (on George Hook’s show) which keeps everything secret for years. If the opposition allow the government to get away with an inquiry with an initial secret scoping phase, followed by an investigating committee that conducts hearings in secret, then they might as well admit they support keeping the government in office.

If Brian Lenihan’s close advisor wants it, and given that Lenihan’s decisions at the time of the bank guarantee and since are a key part of this inquiry, then we should do the opposite.

Set up a US Style Commission with staff, funding etc that takes evidence in private AND PUBLIC. This Irish Financial Crisis Inquiry Commission would have politicians and experts as members – FF/PD/GP/Ind and their henchmen should have decidedly minority representation only. First witness giving evidence in public for 6 hours as with Tony Blair: Brian Cowen.

The FFristocracy want to keep everything secret for as long as possible. This time we shouldn’t stand for it. If the opposition are not complicit with the government they should:

– suspend pairing arrangements
– announce a motion of no confidence in the government
– launch a media offensive in advance
– begin campaign of parliamentary warfare and continue it for rest of the government’s term.

If you’re not utterly opposing this government – you’re supporting them.

PS If Britain can investigate a war in public then advocating Ireland investigates a bank collapse in private indicates…well, you can guess what I think it indicates.

The Pheonix is normally very reliable on internal FF matters:
From The Pheonix Annual 2009, pg 45.
Brian Lenihan’s closest advisers:
“Another confidante is barrister and commentator Noel Whelan.”

Poster Oceanclub on

Have set up a Facebook group named “Demand a PUBLIC Banking Inquiry” to try to coordinate a reaction (lobbying TDs, public protest) against the government’s plans to keep any banking enquiry a secret.

300,000 Empties!!!!
The geographers have calculated that we have 300,000 empty houses:
This is ASTOUNDING and must be to a large extent DELIBERATE.

“Since posting on the number of under-construction ghost estates in Ireland last week, we’ve been asked how many vacant houses there are in Ireland. There is no exact figure released by any state agency, but by using Census 2006, Dept of Environment, Local Government and Heritage, and Geodirectory data, and making a couple of assumptions based on our analysis of these data, we can come up with an estimate – 302,625. This figure includes vacant houses available for sale, vacant houses available for rent, vacant houses that are not on the market, and abandoned properties, but does not include holiday homes of which there were 49,798 recorded in 2006 census.”

Transparency Ireland are having an event tomorrow:

Mark Coughlan:
“Some readers may be interested in attending the Transparency Ireland event taking place tomorrow in Buswells at 1pm.

The topic will be ‘An alternative to silence – protecting whistle-blowers in Ireland’.

See this link for more information.

Speakers include Eugene McErlean, former internal auditor at AIB, Bernadette Sullivan, former nurse at Our Lady of Lourdes Hospital, Tom Clonan, former officer in the Irish Army and now Irish Times defence correspondent; and John Devitt, Chief Executive of TI Ireland.

Do say hello if you spot me (though I will be off back to work afterwards). Gav will probably be there too.”

@ Paul Hunt

I see what you are saying.
On the other hand there could be a view that the people are responsible for where we are today thru the particular expression of said rights.

I accept the rights based approach, but also need to look at the oppurtunity cost of the situation.
What would an election do to the interest rate charged on the national borrowings?
Indeterminable at present, but possibility that we would pay for an election.

The will of the people isnt always chaste and pure, nor even contintent.
As much as we can look at the political parties we need to look at ourselves too, to see if we can become better voters too.
“He’s a gobshite, but he’s our gobsite” wont do it anymore!

This should be reduced to a change in government, we need a change in voter, to produce a change in td, as oppsed to just changing the td.

Reference Federalist paper 10:
The Utility of the Union as a Safeguard Against Domestic Faction and Insurrection

“By a faction, I understand a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.”

We call these constituencies!!

@ E65/ Paul- your are abusing space here in this blog.
It is presumptive and acting in a position of abuse to try to recruit on this site. Presumably all posters are equal, so maybe a little more reading and a little less writing?


When Brian Lenihan said some months ago that we were near the bottom of the housing market did he mean:
1. The market is about to bottom out.
2. I am about to greatly increase the national debt by buying up a huge amount of unsold houses, thus eliminating the market.

The public understood he meant one. It looks more and more like he and the bankers and the developers meant two. Remember that another poster recalled a gathering of developers all agreeing within a narrow range how many floors Dunne’s project would require to be profitable. No one knows the housing market better than FF/PDs/Ind and their associates.

They let this house mountain develop before and since the 2007 election. They have been denying/minimising its existence ever since. I think that in any other mature democracy they would be long gone – for how they have behaved in the NAMA debate let alone what we can now see they did before it.

The house production figures are astonishing:
2006 93419!
Anglo then gets in trouble in early 2007 but the banks – and it now turns out effectively the public – paid for the completion of
2007 78027! How is that possible?
But it doesn’t stop there. Because in
2008 51,724!
Now the guarantee was in Sept 2008. Surely after that the banks could not have built a single house. But for the rest of 2008 and well into 2009…
2009 25,000!

Has building stopped yet because we know who is buying them now – the public through NAMA. We’ve been building empty houses since mid-2005, that’s four and a half years ago. What was going on? Does this not defy all known laws of economics. Who buys a house – to live in or to rent out – when it is certain to remain empty? Who gives them a gigantic mortgage or a gigantic loan when they know there is a tsunami of empty houses appearing and that this will inevitably cause prices to crash and rents to crash?

In April 2006 there were 216,533 empty units – this is a massive oversupply. No wonder the government couldn’t sack any of these bankers. They’ve all been in cahoots for three and a half years – since mid-2006 if not earlier.

Any of the NUIG possie in here got access to the full Alan Ahearne speech he gave there last night? Or at least hear it and want to give your two cents on what he said?


Good call. According to the Indo today, Dr. Ahearne wasn’t on a solo run. John FitzGerald is reported as expressing similar bullish sentiments – as is Dan McLaughlin.


I fully understand your sense of the impossibility of effecting the kind of political and institutional reform that is required. I oscillate between despair and presumption, but hope has to spring eternal. For me the fundamental problem is that, as private individuals, the vast majority of people spend most of, or even more than, what they earn or receive in income as consumers of goods and services. Yet they tend to define themselves – and express themselves politically – in relation to how they earn or receive this income.

However, I would contend that a relatively small proportion of the population are active in what I would describe as the genuinely traded sector (in that they are fully exposed to the vagaries of international markets). Most are engaged in the state, semi-state, sheltered sectors and those parts of the domestic traded sectors that are sheltered to some extent or other. And a large proportion of the population are in receipt of state transfer payments. Therefore, for these sectional interests the focus is on maximising and protecting what they receive – irrespective of the impact on others.

This goes a long way to explain the composition of the Oireachtas – in the main teachers, farmers, publicans, local professionals and business people. We now have an implicit and unholy alliance between those in the sheltered (and partly sheltered) sectors and those in state and semi-state employment (together with those in receipt of state transfer payments). The existing political parties are layered on top of this and seek to secure and retain power by pandering to a majority of this alliance.

Ireland is not unique in this respect. The political system in Britain is equally dysfunctional and this dysfunction is reflected to varying degrees throughout the parliamentary democracies in the EU.

No meaningful change is conceivable until voters begin to join-up the spending side of their existence with the earning side. Citizens as consumers of goods and services are isolated, atomised, fragmented and disenfranchised. This is in the interests of governments and large businesses as it encourages docility.

And, in my view, economics, as a discipline, has failed to highlight and anlayse this need for joined-up thinking in a way that would inform both consumers and policy-makers. Economics, in essence is about the effcient allocation of resources, the productive application of these resources and the generation of economically efficient and socially desirable outcomes.

But what are the chances of more work in this area that focuses on the impact on consumers?

Further to my comments above, where I said:

“Any comparison of changes in social welfare benefits in Ireland and the UK in 2010 needs to take into account the fact that average annual inflation (HICP) is likely to be around 6% lower in Ireland in 2010 than in the UK.”

This now looks likely to be an under-estimate. It is now more likely to be around 7% to 8% lower.

THE UK inflation (HICP) figure for December was published this morning. It exceeded expectations. UK y-o-y inflation came in at 2.9%, compared with economists’ expectations of 2.5%. So, the gap between Ireland’s and the UK’s y-o-y inflation rates widened to 5.4% in December (-2.5% in Ireland, +2.9% in the UK). However, this was before the VAT changes that came into effect on 1 January. A cut of 0.5% in Ireland, and a rise of 2.5% in the UK. So, the inflation rate differential is likely to hit about 7% in January and increase throughout 2010. In December alone, prices fell by 0.5% in Ireland and rose by 0.6% in the UK, a 1.1% gain in a single month, unaffected by any tax changes. In addition, the Euro is about 3% lower against the Pound sterling compared with January 2009, so the y-o-y gain in price competitiveness will be around 10% in January.


I hear that Alan Ahearne has now changed his name to AlanTheOptimist.


I think your post is more closely linked to the “Competitiveness Challabge” thread than to anything here. However, it is interesting, but not surprising, that Britain’s effective devaluation is reducing the cost of imports from there to here and contributing to the continuing fall in prices here. I also suspect it’s putting pressure on the, not fully exposed, Irish producers in the domestic traded sector.

Although one can only admire your ability to grasp every straw in the wind to make a bale, the Irish baidin will struggle to rise with the external rising tide. Considerable structural reform of competition and regulation is required to make the craft fully seaworthy. This task was ignored during the last major realignment of economic policy in the late ’80s and early ’90s. The failure to tackle these deeper underlying problems sowed the seeds for the current debacle. And it is even more pressing now to boost economic performance and to prevent a future repetition of this mess.

It may not be wise to navigate exclusively by the stars of price deflation and GDP growth while the craft remains holed below the waterline.

I like much of what you say, but straight-lining UK inflation is a little risky. The UK has put off its deflation. If faces three possibilities – oops, moderation or deflation.

Rising interest rates, an end to QE and budget cuts would seem to hint at deflation. If they do not happen, oops-inflation may be the result, but moderation, in the current international climate, would seem to be the least likely of the three?


AIB gave the Zoe group half a billion, IN MARCH 2009, for what a judge describes as astonishingly and extrordinarily inadequate security:

“the loans which were drawn down subject to a facility agreement in March 2009.”

“A SENIOR judge expressed astonishment that AIB handed out €550m loans to five companies formerly controlled by Liam Carroll with only a letter and the deposit of title deeds as security.

Mr Carroll’s biggest lender yesterday moved to protect its loans — which are in default — by securing court orders aimed at ensuring the strength of its security.

But High Court judge Mr Justice Peter Kelly said that it was “astonishing” and “extraordinary” given the vast sums involved that AIB’s only security for the borrowings was letters of undertakings from a solicitors firm and the deposit of title deeds.”

“Mr Justice Kelly said, for such a huge amount of money involved, it was “extraordinary” that security was based on solicitors’ letters of undertaking.

He said this was “fragile” security and in some instances the letters mis-stated the name of the Zoe company that owned the property involved.”

Critics of the security underlying loans were smeared and insulted:

With first McNamara and now Zoe we learn the truth. A JUDGE has described the security obtained by a bank from a developer, IN MARCH 2009, for HALF A BILLION OF LOANS as:

Karl Whelan was being far, far too optimistic here:

The above issue is discussed in the economy forum of on the following thread:
Judge shocked at AIB security when lending to Carroll firms

You never did like my Jesuit criticisms. Here is a snapshot of the alumni of one non-Jesuit, CBS institution, illustrating how small Ireland is and the potential for group think:

Politics and Public Administration
Cearbhall O’Dalaigh – 1928 (President of Ireland)
Liam Cosgrave – 1937 (Taoiseach)
Richie Ryan – 1946 (Minister for Finance)
Frank Feely – 1949 (Dublin County Manager)
Dr. Michael Woods TD – 1954
John Swift – 1958 (Irish Ambassador – The Netherlands)
Hugh Swift – 1961 (Irish Ambassador – South Africa)
Liam Lawlor TD – 1962
Eric Byrne TD – 1965
Dermot McCarthy – 1971 (Secretary General to the Government)

Ron Bolger – 1965 (Former Chairman of Bord Telecom)
Don Godson – 1957 (Chairman of CRH)
Kieran McGowan – 1961 (Chief Executive of IDA)
Jim Culliton – 1952 (Chairman of AIB)
Dermot Nally – 1947
Ronald Corbett – 1957 (Chief Executive Amev Insurance)
Liam Donlon – 1965 (Director, Irish Intercontinental Bank)
Peter Keenan – 1968 (Chief Executive of Parc Group)
Brian Forrester – 1969 (Managing Director or ICS Mortgagelink)
Dermot Jewell – 1969 (Chief Executive of Consumer Association of Ireland)
David Simpson – 1972 (BDO Simpson Xavier)
John O’Dwyer – 1974 (Managing Director of Friends First Life Assurance)
Austin Hughes – 1975 (Chief Economist of Irish Intercontinental Bank)
John O’Neill – Chief Executive of Axa
John Corrigan – Director of the NTMA

Richard Grogan – 1956 (Irish Times Political Editor)
Deaglan deBreadun – 1967 (Irish Times Political Editor)
Pat Courtney – (Irish Independent Sports Editor)
Tony Leen – 1982 (The Examiner Sports Editor)
Martin Wall – 1984 (Sunday Tribune News Editor)

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